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China probe concerns Fosun boss' "personal affairs"

Sun, Dec 13, 2015 - 10:27 PM

[BEIJING] Guo Guangchang, one of China's best-known entrepreneurs, is helping police with an investigation that focuses mostly on his personal affairs, the president of Guo's investment conglomerate Fosun International said on Sunday.

Fosun had confirmed on Friday that Guo, a self-styled student of investor Warren Buffett, was assisting authorities with a probe, a day after local media said the group had lost contact with its billionaire founder.

"It is mostly about his personal affairs," company president Wang Qunbin told a conference call when asked whether the investigation was into the company, or Guo personally.

Neither Wang nor chief executive Liang Xinjun, who told the same conference call that Guo was in Shanghai, gave any further details about the nature of the investigation.

The CEO said Guo was able to take part in major decisions involving the company, but also said Fosun had the management structures and business strength to withstand Guo's absence, saying it did not rely on "any one executive." Guo's sudden absence and the lack of detailed information that the company has given about his status underline the opaqueness of China's legal system.

A string of senior executives at Chinese companies have temporarily gone missing this year amid a crackdown by Beijing on its financial sector.

Fosun International's shares and convertible bonds, as well as shares in companies controlled by Guo, were suspended in Hong Kong and the mainland on Friday. Fosun International shares and convertible bonds were due to resume trade on Monday.

Liang said the company would consider buying back stock if the share price fluctuated. He said progress on the company's current deals was "proceeding normally." The question of Guo's whereabouts has already come to the attention of banking supervisors in Europe, where Fosun is in a battle to buy Anglo-German bank BHF Kleinwort Benson, people familiar with the regulatory process said on Friday.

Fosun had been given a green light by the European Central Bank for its takeover, but with reservations, two of the people said.

Guo, 48, has built an empire of industrial companies, alongside a host of insurance, banking and asset management firms. He is a delegate to the Chinese People's Political Consultative Conference and has amassed a personal net worth of $5.7 billion, according to Forbes.

Earlier this year, Fosun clinched a billion-dollar takeover of the Club Med resort chain. In total, Fosun has spent more than $30 billion on foreign acquisitions and at the end of June 2015, it had total assets worth $55 billion.